CBR key rate falls short of ’24 inflation target – VTB official

The Central Bank of Russia’s (CBR) current key interest rate of 16 per cent is insufficient to reduce inflation to the projected 4.3–4.8 per cent range for 2024 and needs to be increased, stated Dmitry Pyanov, first deputy CEO of state bank VTB, on Wednesday, as per Interfax.

The rate helped lower inflation from 11 per cent to 6-7 per cent but is now inadequate to meet the CBR’s forecast. Pyanov suggested a rate hike to 17–18 per cent and emphasised the importance of clear medium-term rate forecasts to anchor inflation expectations.

CBR will consider raising the rate at its June 7 meeting, with deputy governor Alexei Zabotkin confirming this possibility. The current rate was left unchanged at 16 per cent in April, but a 100 basis point increase to 17 per cent was considered.